Rising Indo-Pak tensions, global cues drag equity markets lower

Mumbai: Escalating cross-border tensions with Pakistan, coupled with negative global cues, pulled the Indian equity markets lower on Wednesday.

Besides, caution ahead of derivatives expiry on Thursday and heavy selling pressure in capital goods, healthcare and metal stocks hampered investors' sentiments.

The wider 51-scrip Nifty of the National Stock Exchange (NSE) fell by 25.60 points or 0.27 per cent to close at 9,360.55 points.

The 30-scrip Sensitive Index (Sensex) of the BSE, which opened at 30,446.77 points, closed at 30,301.64 points -- down 63.61 points or 0.21 per cent from its previous close at 30,365.25 points.

The BSE market breadth was bearish -- with 2,102 declines and 635 advances.

"Markets ended lower on Wednesday with the Nifty breaking the support of 9,370. Sentiment was dampened by escalating Indo-Pakistan tensions. Moody's downgrading its sovereign credit rating on China also hurt risk-appetite," Deepak Jasani, Head (Retail Research), HDFC Securities, told IANS.

"Broad market indices like the BSE mid-cap and small-cap indices fell more, thereby underperforming the Sensex. Major Asian markets ended on a positive note, barring the Jakarta index, while European indices like CAC 40 and DAX traded lower."

The S&P BSE mid-cap index slipped by 1.43 per cent and the small-cap index by 1.44 per cent.

Anand James, Chief Market Strategist, Geojit Financial Services, said: "Wobbly rupee and cross-border tensions framed a volatile market, despite of positive updates on early monsoon and some encouraging earning numbers."

"Consumer goods sector showcased some promise in the opening hours, which is a good sign ahead of the monsoon arrival. Markets will now focus on FOMC (Federal Open Market Committee) minutes and OPEC (Organisation of the Petroleum Exporting Countries) meet scheduled ahead, especially with oil prices holding well above $50."

On the currency front, the rupee strengthened by 15-16 paise to 64.73-74 per US dollar from its previous close of 64.89.

"The equity benchmark index -- CNX Nifty -- extended losses of last trading session on selling pressure at higher levels," Dhruv Desai, Director and Chief Operating Officer of Tradebulls, told IANS.

"Most pharma sector stocks traded down, led by Lupin, Wockpharma and Auro Pharma. Lupin fell more than six per cent after it posted 49.2 per cent drop in net profit in the fourth quarter ended March 2017 due to erosion of base business in US."

Sectorwise, the S&P BSE capital goods index plunged by 458.68 points, the healthcare index by 275.71 points and the metal index by 246.97 points.

On the other hand, the S&P BSE oil and gas index rose by 68.30 points and the automobile index was up by 14.97 points.

Major Sensex gainers on Wednesday were: Tata Motors, up 4.30 per cent at Rs 469.45; Gail, up 2.56 per cent at Rs 390.20; Adani Ports, up 2.41 per cent at Rs 340.05; Hindustan Unilever, up 1.76 per cent at Rs 1,038.05; and Tata Consultancy Services (TCS), up 1.48 per cent at Rs 2,557.80.

Major Sensex losers were: Larsen and Toubro (L&T), down 3.22 per cent at Rs 1,684.95; Cipla, down 2.40 per cent at Rs 520.35; Dr. Reddy's Lab, down 2.24 per cent at Rs 2,520.55; Coal India, down 2.20 per cent at Rs 262.10; and State Bank of India, down 2.08 per cent at Rs 283.15.

--IANS